It takes constant vigilance to maintain compliance and protect your data against breaches. SOC 2 is a set of guidelines meant to help companies secure their data environment. Specifically, this regulation applies to businesses that store customer data on the cloud.
SOC 2 certification sends a strong message that your organization prioritizes the critical attributes of availability, confidentiality, privacy, processing integrity, and security. It shows that you’ve enacted measures for securing your data environment. Although SOC 2 certification alone doesn’t prove that your organization is 100% secure, it’s an excellent place to start and helps instill trust among your customers and vendors.
The Foundations of SOC 2
Previously, the Statement of Auditing Standards No. 70 (SAS 70) was the standard for evaluating service organizations. The standards were enacted in the early 1990s, and Certified Public Accountants conducted the audits. These audits were performed to establish and report the efficacy of organizations’ internal financial controls.
SOC 1 and SOC 2 reports were introduced in 2010 by the American Institute of Certified Public Accountants (AICPA). Their purpose was to address the need for organizations to validate and communicate the status of their data environment publicly. Today, SOC 2 reports are primarily written on audits undertaken against the Trust Services Criteria. Therefore, getting certified shows your organization’s maturity around data security and business processes.
A Breakdown of the SOC 2 Trust Services Criteria
The Trust Services Criteria are classified under the following categories:
Systems and information therein should be available for use and operation at all times to ensure that the entity’s objectives are met.
Your system should be protected against unauthorized access as well as the unauthorized disclosure of data. Besides, measures should be implemented to prevent damage to the system, which might compromise the confidentiality, privacy, availability, and integrity of your data.
Data that is designated as confidential should be protected to ensure that your organization’s objectives are met.
- Processing Integrity
Your system’s data processing should be accurate, timely, valid, and authorized.
Personal information should be collected, used, stored, transmitted, disclosed, and disposed of responsibly.
SOC audits are generally organized around the five Trust Services Criteria, which are also referred to as Trust Principles. When an audit is performed, you will choose the principles that you want the SOC 2 auditor to attest to. Thus, you need to make a business decision guided by what’s essential to your clients.
In most cases, the privacy principle isn’t included in SOC 2 audits. Although this trust service criterion is valuable, most organizations center their data privacy efforts on EU regulations such as GDPR or HIPAA compliance. Most European organizations undertake audits against their standards, instead of SOC 2.
How Are SOC 2 Audits Conducted?
The AICPA defines SOC 2’s reporting standards. Therefore, all audits should be signed off by licensed CPAs. For your company to attain SOC 2 certification, it needs six to twelve months to prepare for the audit. Preparation entails identifying systems that need to be audited, developing procedures and policies to guide the audit, and implementing security controls to minimize risks.
Once you are ready for an audit, you need to hire an auditor. The audit process involves scoping, on-site visits, and the collection of relevant documentation. During an on-site visit, the auditor will interview staff and review the submitted material. Scoping primarily involves determining the type of audit that you want to be undertaken. You can either choose to undergo a SOC Type I or Type II audit.
- SOC Type I audits are conducted against the five Trust Services Criteria at once. This is done to determine whether the relevant security controls that you have in place are appropriately designed.
- SOC Type II audits are conducted over a more extended period. The initial audit often covers six months, then one year after that. A Type II audit seeks to determine the effectiveness of the controls that were in place over a specified period.
It’s easy to prepare for and conduct Type I audits because the auditor won’t have to review historical data. Although Type II audits take more time than Type I audits, they are more valuable to your organization. They report on what your organization is doing to safeguard its data environment, rather than what you intend to do. Organizations should work towards the Type II report since it gives them a more in-depth insight into their data security. In the long run, Type II reports also offer financial savings to organizations.
Your company can benefit from establishing a level of trust with its customers and other stakeholders. Every company collects personally identifiable information from its customers. Therefore, you should be concerned with how the information is protected. SOC 2 compliance enables you to protect your data environment better, besides giving you the external validation that you are managing risks appropriately.